Happy International Women’s Day 2019! A parent or guardian of the girl child can accumulate a sizeable corpus by investing in fixed deposits.

Public Provident Fund (PPF) is preferred higher over the conventional term deposits and fixed deposits due to its EEE status. | Photo Credit: Representative Image

New Delhi: Happy International Women’s Day 2019! Investing options which offer good returns and are less riskier in nature are preferred the most by the risk-averse people. In order to secure the future of a girl child, there are a couple of investment choices with which a parent or guardian of a girl child can plan for her future.

As far as the safe long-term investment options are concerned, a parent or guardian can consider investing in fixed deposits (FD) offered by various scheduled commercial banks, Public Provident Fund (PPF) and Sukanya Samriddhi Account. All the aforementioned investment options are completely risk-free as all of these are backed by the government and government-regulated entities.

Fixed deposits (FD)

Fixed deposit (FD) account is one of the safest and the most common investment option. The prime reason for its popularity is the easy accessibility, convenience of opening, risk-free returns, and much more. Various banks and financial services companies offer an interest rate of up to 9.25 per cent on fixed deposits for various tenures. A parent or guardian of the girl child can accumulate a sizeable corpus by investing in fixed deposits. If the Interest earned on fixed deposits is more than Rs 40,000, then it will be taxed at the rate of 10 per cent in a particular financial year.

Public Provident Fund (PPF)

Public Provident Fund (PPF) is preferred higher over the conventional term deposits and fixed deposits due to its EEE status. The amount invested in the PPF account is eligible for tax deduction, the interest earned and the amount withdrawn at the maturity is also tax-exempt. According to the prescribed guidelines, the current interest rate offered on the PPF account is 8 per cent. In PPF, there is a lock-in period of 15 years and a parent can open the PPF account on the behalf of minors.

Sukanya Samriddhi Account

Sukanya Samriddhi Account is the best investment options as compared to a fixed deposit, Public Provident Fund. Sukanya Samriddhi Account offers an interest rate of 8.5 per cent and it also falls under the EEE category. There is a lock-in period of 21 years in the Sukanya Samriddhi Account. A parent or guardian of a girl child can open Sukanya Samriddhi Account before the age of 10 years of a girl.